Iran: To run out of cash to import gasoline in August

Time for plan C? (Plan B didn't work. Neither did Plan A. And whatever happened to the Iranian petro bourse?)

Iran, which imports more than 40 percent of the gasoline it uses, will run out of funds to import the commodity in early August, forcing the country to either increase its budget for imports or start rationing.

More than $1.5 billion of the $2.5 billion budgeted for gasoline imports this year has already been spent, Hojatollah Ghanimifard, National Iranian Oil Co.'s executive director for international affairs, said today to Shana, the Iranian oil- ministry's press agency. The rest will be spent over the next 1 1/2 months, he predicted. In 2006, Iran's parliament had to approve an emergency budget extension of $2.5 billion to bridge the gap. The Islamic republic has tried for more than a year to implement a gasoline-rationing program to curb consumption. Demand is buoyed by subsidies and supply is restricted by waste and scant refining capacity. Service stations in Iran offer the fuel at 1,000 Iranian rials a liter, or about 42 U.S. cents a gallon.

Earlier this month, Iran pushed back a rationing plan until late July to give the government more time to agree on a quota for drivers. An initial plan to limit consumption to as little as three liters a day per car was dropped last September because of fears of popular discontent.

And it looks like some of the remoter areas of Iran are already having gas pains... Rural Gas Distribution Criticized.

Oil Minister Kazem Vaziri Hamaneh will attend a Majlis session today to respond to a number of questions on poor gas distribution to rural districts. Lawmakers are critical about the ministry’s performance in supplying gas to remote and deprived villages, Mehr reported on Monday.

Hmm. What will August bring? Will it suddenly get awfully hot in the Straits of Hormuz?

Update: Japanese banks curb loans to Iraq - and they're refusing to pay for their oil imports in currencies other than US dollars. Arigato gozaimasu, Japan.

Japan’s banks are stepping up financial pressure on Iran - restricting loans and rejecting an Iranian request to pay for oil imports in currencies other than dollars, Britain’s Financial Times quoted banking and official sources as saying.Three Japanese banks - Bank of Tokyo Mitsubishi UFJ, Mizuho, and Sumitomo Mitsui – had informed the Iranian authorities in April that they would not conduct new business in Iran, the FT quoted a senior banker as saying.